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Should a Monopolist Have to Charge Money to be Subjected to a Nondiscrimination Requirement?

In a prior post, I explored the question whether private monopolists, such as Facebook, Twitter, and Google should be subject to a nondiscrimination requirement.  I argued that a strong case could be made (assuming they were monopolists) for the legitimacy of subjecting them to such a requirement on the ground that they can exercise coercion.

One objection to applying such a nondiscrimination to Facebook, Twitter, and Google is that many of these services do not charge the consumer.  Since the traditional limitations on common carriers, such as railroads and inns, involved entities that charged, the argument concludes that the nondiscrimination requirement should not apply to these new companies.

But it is not clear why the fact that these sellers do not charge should exempt them from the nondiscrimination requirement.  One possibility is that if someone does not charge, they do not owe an obligation to the consumer.  But this premise is not really true.  When one watched old broadcast TV with an antenna, one was not charged.  Instead, one gave up one’s time by watching the commercials.  There was something of a quid pro quo, even though one was not charged.  Similarly, when one uses Facebook or Google, your use helps them sell advertising.  Thus, with both TV and Facebook, there is something of an exchange.

But even if one did not incur some cost to receive the service, that should not really eliminate the obligation for the seller not to discriminate.  Why should the fact that the seller is providing something for free (but for their own benefit) exempt them from the nondiscrimination requirement?  It is true that the consumer appears to be accepting the benefit voluntarily.  But a monopolist that charges is also providing something that the consumer appears to accept voluntarily.

The reason we might impose the nondiscrimination requirement is that the monopolist would be able to exercise coercion over the consumer.  The service is valuable and the monopolist might induce the consumer to behave in a certain way in order to receive the service.  This applies not merely to a consumer that pays money, but also to a consumer that “pays” only by viewing advertising.  If the service is sufficiently valuable, then the monopolists can use its power to get the seller to behave in a certain way.  If using Facebook is valuable enough, then one may refrain from saying certain things that will displease Facebook in order to be able to continue to use the service.

The real question is whether these service providers are actually monopolists – a question I hope to address in the near future.

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